The Dorilane Company produces a set of wood patio furniture consisting of a table and four chairs. The company has enough customer demand to justify producing its full capacity of $3,900$ sets per year. Annual cost data at full capacity follow:

Direct labor $ $86,000$

Advertising $ $97,000$

Factory supervision $ $70,000$

Property taxes, factory building $ $20,000$

Sales commissions $ $59,000$

Insurance, factory $ $5,000$

Depreciation, administrative office equipment $ $1,000$

Lease cost, factory equipment $ $11,000$

Indirect materials, factory $ $19,000$

Depreciation, factory building $ $103,000$

Administrative office supplies $($billing$)$ $ $6,000$

Administrative office salaries $ $105,000$

Direct materials used $($wood$,$ bolts, etc.$)$ $ $430,000$

Utilities, factory $ $48,000$

Required:

$1.$ Enter the dollar amount of each cost item under the appropriate headings. Note that each cost item is classified in two ways: first, as variable or fixed with respect to the number of units produced and sold; and second, as a selling and administrative cost or a product cost. $($If the item is a product cost, it should also be classified as either direct or indirect.$)$

$2.$ Compute the average product cost of one patio set.

$3.$ Assume that production drops to only $1,000$ sets annually. Would you expect the average product cost per set to increase, decrease, or remain unchanged?The Dorilane Company produces a set of wood patio furniture consisting of a table and four chairs. The company has enough

customer demand to justify producing its full capacity of $3,900$ sets per year. Annual cost data at full capacity follow:

Required:

Enter the dollar amount of each cost item under the appropriate headings. Note that each cost item is classified in two ways: first, as

variable or fixed with respect to the number of units produced and sold; and second, as a selling and administrative cost or a product

cost$.($If the item is a product cost, it should also be classified as either direct or indirect.$)$

Compute the average product cost of one patio set.

Assume that production drops to only $1,000$ sets annually. Would you expect the average product cost per set to increase, decrease,

or remain unchanged?